Weekly Market Report 07/21/14

This Week’s Headlines:

Gold
BRICS Countries meet to create a New International Bank
Silver
Silver Institute Reports Increasing Silver Demand in 2014
The July 2014 CoinStats is Now Available
Recommended Investment Commitment and Diversification

GOLD

A major Gold seller hit the U.S. Gold market with a massive sell order last Monday and Tuesday. After six straight weeks of increases in the Gold price, this event was what started the week with a correction, reaching a low of $1,292 before rallying back. On Monday Gold dropped $30 per ounce after an individual, corporation or country dumped $1.37 billion worth of Gold into the U.S. Commodity futures market at the opening of trading. On Tuesday that same seller dropped another $2.37 billion in Gold futures at the opening, driving Gold down $9.60 per ounce. These massive orders caught the Gold market by surprise and it got slammed $40.30 per ounce, temporarily breaking the important $1,300 per ounce support level.

By Thursday the combination of the Malaysian Commercial Aircraft having been shot down over the Ukraine and the Israeli forces moving into the Gaza Strip heightened geopolitical concerns, which drove up the Gold price by $20 per ounce. Gold ended the week at $1,309.40 per ounce, down $28 per ounce on extremely high weekly volume.

Last week’s geopolitical events stopped massive selling from driving the Gold price under its major support level. I believe that Gold’s uptrend is still intact and investors will continue to be aggressive buyers of Gold as the ultimate safe haven investment during any escalation of the current Ukrainian and Israeli crisis. Remember, I am still looking for Gold to reach the next major resistance level of $1,392 per ounce (this year’s high) very soon.

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BRICS Countries meet to create a New International Bank

On July 15 and 16 Brazil welcomed the leaders of Brazil, Russia, India, China and South Africa to the Sixth Annual BRICS summit meeting in the north-eastern Brazilian city of Fortaleza.

During the summit the five leaders agreed to create a new international development bank. The BRICS nations will initially capitalize the bank with $50 billion dollars, by contributing $10 billion dollars each, with another $50 billion in reserve. The BRICS nations are a financial powerhouse and are likely to dominate development banking. The government-owned China Development Bank already has rivaled the Western-dominated World Bank in issuing overseas loans since its formation in 1994. The bank will be headquartered in Shanghai, with the first regional office to be located in Johannesburg. India gets the first presidency which will then rotate, first to Brazil then to Russia.

The five BRICS Nations leaders also announced a $100 Billion Crisis Fund, which would compete with the IMF.

I don’t believe that it is a coincidence that all five of these countries have been building up their central bank Gold holdings for years. That is why I believe that these are just three steps that will ultimately create a unified currency designed to replace the U.S. Dollar as the world’s reserve currency.

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SILVER

Last Friday Silver closed at $20.88 per ounce, down $0.57 per ounce for the week. After six straight weeks of moving higher, Silver faced sympathetic selling when Gold dropped $30 last Monday. After breaking below the important $21 per ounce support level, Silver hit a low of $20.63 per ounce before seeing bargain buyers. I expect to see Silver move back to above the $21 per ounce level this week and resume its bullish course, reaching above the $21.60 resistance level by the end of this month.

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Silver Institute Reports Increasing Silver Demand in 2014

The Silver Institute reported last week that investor and industrial consumption of Silver has advanced at a healthy pace in 2014, which was reflected in the Silver price increasing 5% as of July 15 from the start of the year.

Building on an impressive 2013, investors continued to boost Silver holdings in the first half of 2014. Silver exchange traded funds (ETF) backed by physical Silver added seven million troy ounces of Silver bullion through June; in contrast, Gold ETF holdings dipped by 1.4 Million ounces over the same time period.

Globally, Silver bullion coin sales are up 4.5 percent through the first quarter of 2014, according to precious metals consultancy Thomson Reuters GFMS. U.S. Mint sales of American Eagle Silver Bullion coins maintained near record level sales, totaling 24.1 million ounces for the first six months of 2014, just shy of the 25 million ounces sold in the first half of 2013, threatening to overtake the record sales of 42.7 million American Eagle coins that were acquired by investors last year.

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The July 2014 CoinStats is Now Available

Our numismatic CoinStats report is the best investment tool for rare coin investors. CoinStats is an in-depth statistical analysis of popular rare coin series that allows you to identify the best values in certified rare coins. I am proud to offer this unique and informative tool exclusively to our clients. The CoinStats is now updated for July 2014 and is available in PDF format. I have added $10 Gold Indians to the other five series of $20 Gold Saint Gaudens, $20 Gold Liberties, Morgan & Peace Silver Dollars, and the Walking Liberty Half Dollar series.

The CoinStats Report provides a list of my recommended certified U.S. Gold and Silver coins which are found listed on the Best Value page. These are not the modern issue bullion coins or low-grade circulated coins. These are PCGS/NGC Certified MS63 or higher Gold and Silver U.S. rare coins, dated prior to 1936, which have a proven track record of appreciation and also offer excellent liquidity. To receive the latest CoinStats analysis, just insert the word CoinStats on the subject line and email me which of the six series you would like to see and which format.

I have enlarged the CoinStats algorithm by adding a new column that shows the increase in the PCGS/NGC population for the past five years. Investors realize that the PCGS/NGC population does increase, but comparing the percentage of that increase is an important component in the selection of undervalued Gold and Silver rare coins.

What is surprising? Some of the five year population results in the CoinStats report show that some coins have actually declined over that period. How could this happen? There are a number of legitimate reasons that a PCGS and/or NGC certified coin could have a lower population in a five year period.

1. The coin could have been cracked out of its holder and re-submitted, but the owners never sent in the old certificate to the grading service so that it could be deducted.
2. The coin could have been upgraded or crossed and the owner never sent in the PCGS or NGC label.
3. Because the new PCGS/NGC Plus grades are not yet incorporated into the CoinStats numbers, the coin may now have a Plus grade.

Plus grades will be added to the CoinStats Report when the quantities increase to a level that allows me to incorporate them into the statistical analysis

Because I believe that CoinStats is one of the best tools for rare coin collectors and investors to recognize great value, I will continue to look for ways to provide more important information. Your input on CoinStats is always appreciated.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% of investment capital

Diversification:  Gold 50%, Silver 45%, Platinum & Palladium 5%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products

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If you want to be updated on what is happening in the Gold, Silver, and Rare Coin markets any weekday, our company offers a daily blog Monday through Friday at www.stupplerblog.com

All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Stuppler & Company’s knowledge at this time.  Stuppler & Company disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein.  Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability.  All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions.

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